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Customer communication and engagement is crucial for any business, and the quality of your customer service can make or break your success. Particularly for small businesses, customers will appreciate a personable approach and respond to a business that cares about their concerns. In some cases, the law may have a specific standard for how your business can communicate with your customers and the kinds of claims you can make. This article will cover some broad areas of law that may apply to your business when you communicate with customers. Additionally, there may be other laws that apply to your particular industry or business type, so make sure you know these as well.

Accurately Represent Your Product or Service

If you sell consumer goods or services, ensure that you portray an honest and transparent image of the things you sell. When you communicate with customers, whether through conversation or via your advertising materials, ensure that you do not make any claims you cannot back up with evidence. Otherwise, you may face substantial legal penalties. Depending on the nature of the products you sell, you may also have mandatory information requirements you need to disclose.

For example, customers may purchase your products because of their low carbon footprint and sustainability benefits. In your communications with your customers, do not make environmental claims unless you have the science or evidence to back them up.

When drafting sales contracts with your customers, ensure that you include a good description of the product or service you are selling, as well as any other essential terms. If you are operating contracts online, be sure that you have some form of customer acceptance.

Do Not Mislead Your Customers

Furthermore, when communicating with your customers, you could face hefty legal fines if you mislead them. If a court finds that you have engaged in misleading or deceptive conduct, under the Fair Trading Act, per offence, you could face fines up to:

  • $200,000 for individuals; and
  • $600,000 for body corporates.

Therefore, you should maintain a high standard of honesty with your customers. Be clear in your advertising, especially when advertising specialised products. Industry jargon and scientific language may confuse customers, who may then make incorrect assumptions about your products. Take extra steps to ensure that you do not mislead your customers about:

  • the nature or quality of your products or services;
  • their consumer rights when engaging with you;
  • any contractual rights they may have; or
  • your product or service’s suitability for their needs.

For example, say that you do a demonstration instore of your cleaning sponge’s effectiveness in cleaning up spills. Customers are entitled to certain consumer guarantees, which you must uphold. One of those guarantees is that the products they buy will match any demonstrations or samples in-store.

If a customer buys a faulty product or one that is not as effective as your demonstration, there are potentially two legal issues here. You may have: 

  • misled the customer regarding the true effectiveness of the sponge; and 
  • broken a consumer guarantee.

Protect Sensitive Conversations & Information

If you deal with any personal information (such as a customer’s address or payment details), you must take steps to protect the privacy of your customers regarding that information. If you are having a private or confidential conversation with a customer, do so where others are not likely to overhear.

This is especially true if you operate online. If you communicate with customers online or they send you their personal information, ensure that you are doing so over an encrypted connection.

When you collect personal information, you need to inform your customers you are doing so. You can do this with a privacy policy.

Do Not Spam Your Customers

You may use email marketing to communicate with your customers, such as sending out a monthly newsletter. This can be an effective way to maintain customer engagement if you manage it correctly. However, any unsolicited electronic messages of this nature may be considered spam and against the law. To avoid this, make sure that you have:

  • your customers’ consent to send them such newsletters; and
  • an unsubscribe button in any email marketing communications.

Handle Their Complaints Appropriately

Every business will deal with customer complaints, and yours is no different. The law does not require that you provide a remedy or solution for every customer complaint. However, you must:

  • investigate every complaint you receive;
  • not unduly delay dealing with a complaint; and
  • not refuse to handle a customer’s complaint entirely.

Be sure to remain polite and professional with your customers, especially on social media. If a customer complains via social media, respond promptly and courteously.

Key Takeaways

Effective communication with your customers indicates good customer service, which will help you retain your existing customers and expand your customer base. Ensure you are aware of any applicable legal obligations when your business needs to communicate with your customers about certain topics or through certain communication methods. If you would like more information or help with your customer communication, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Do any laws apply to what I can say to my customers?

Under the Fair Trading Act, you cannot mislead your customers or make claims that you cannot back up with evidence. Aim to be as honest as possible with your customers, particularly around their rights when they purchase from you.

What is personal information?

Personal information is any information about an identifiable individual. This means you can use this data to identify a living individual, such as their name or IP address.

What is spam?

Spam covers unsolicited electronic messages. These are commercial messages sent through something like email or text, that the recipient did not consent to receive. Spam is illegal in NZ.

Can I refuse to handle a customer’s complaint?

You cannot outright refuse to handle a customer’s complaint, or needlessly delay handling it. However, you do not have to provide a solution for every customer complaint. You just have to listen and investigate.

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